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* Asset firm aimed at boosting banks' lending
* Experts say Vietnam's real NPL ratio far higher
HANOI, May 21 Vietnam's government approved on
Tuesday the formation of an asset management firm to buy bad
debt from its troubled banks, an official said, a move that
could help stimulate an ailing economy growing at its slowest
pace in 13 years.
The long-delayed "bad debt bank", the Vietnam Asset
Management Corp (VAMC), would be run by the State Bank of
Vietnam (SBV) and is tasked with trimming down what is widely
seen as Asia's highest ratio of non-performing loans (NPLs).
"The SBV has received information that the government has
approved the plan for the VAMC," Trinh Ngoc Lan, a State Bank of
Vietnam official told Reuters, adding that details of when and
how the firm would operate were not yet available.
Banks saddled with toxic debts, about half taken out by
state-run firms, has been a drain on Vietnam's once thriving
economy, squeezing credit growth and consumer spending, sinking
the real estate market and contributing to the closure of an
estimated 113,000 firms since 2011.
Hopes that the VAMC could offer some relief to the economy
sparked a rally this week on the benchmark VN index,
driving the bourse to a one-month high on Tuesday, led by bank
and property-related stocks.
The government sought to paint a rosier picture of the debt
problem in the banking sector on Monday, announcing to
parliament that NPLs accounted for 4.51 percent of total loans,
a figure calculated from information provided by the banks
The government said in February that bank NPLs stood at 6
percent, or $7.8 billion, but independent economists estimate
the figure could be as much as three times higher and warn that
the $24 million capital the VAMC will operate with is
Central bank deputy governor Dang Thanh Binh last month told
Reuters the VAMC would initially buy NPLs in real estate only,
in return for special bonds that can be used to borrow from the
central bank to boost lending and stimulate an economy that grew
just 5.03 percent last year.
The VAMC could fix half of the NPLs in the banking system,
Vu Viet Ngoan, chairman of the National Financial
Supervisory Committee, estimated the VAMC would tackle about 100
trillion dong ($4.8 billion) of bad debt on the books of banks.
"The VAMC is not a magic wand to settle all the problems, it
will be just a part," Ngoan told financial news website
(ndhmoney.vn) on Tuesday. "There need to be other measures."
(Compiled by Ngo Thi Ngoc Chau; Writing by Martin Petty;
Editing by Robert Birsel)